By Dipo Olowookere
The International Monetary Fund (IMF) has advised Nigeria to embark on a full Value Added Tax (VAT) reform.
With this in place, according to the global lending firm, the country’s economy would be on the way to full recovery.
The lender’s Mission Chief for Nigeria, African Department, Mr Amine Mati, who was a guest at the 2017 Chartered Institute of Bankers of Nigeria (CIBN) Investiture in Lagos last weekend, said government must raise taxes where necessary, especially on luxury items.
According to Mr Mati, the Federal Government must broaden its VAT system by revisiting exemptions.
At the event themed ‘Coherent set of Policies for Greater Exchange Rate Flexibility, the IMF chief in Nigeria said government should consider cancelling tax holidays and exemptions that erode the Company Income Tax (CIT) base.
In addition, government should also increase taxes on alcohol and tobacco and broaden VAT by revisiting exemptions, he said.
Mr Mati noted that if the Federal Government can work reform its tax system, the economy would be jumpstarted.
Lately, Nigeria has looked toward tax to generate more revenue due to its fall into recession last year.
Minister of Finance, Mrs Kemi Adeosun, has consistently said government intends to increase its revenue by increasing its tax base.
According to Federal Inland Revenue Service (FIRS), the total number of tax payers in Nigeria is just 12,649,654 [as at April 2017]. Of these, 96 percent have their taxes deducted at source under PAYE and just 4 percent comply with Direct Assessment.
In June 2017, the Federal Government launched the Voluntary Asset and Income Declaration Scheme (VAIDS).
The platform was put in place for defaulting Nigerian taxpayers to work out a flexible way to pay their outstanding tax liabilities due from them relating to the last six relevant tax years, regularize their tax transactions and obtain genuine tax clearance certificate for all the relevant years without fear of criminal prosecution for tax offences and with the benefit of forgiveness of interest and penalties.
Mrs Adeosun had stated at the launch of the initiative that the policy embraces all federal and state taxes such as Companies Income Tax, Personal Income Tax, Petroleum Profits Tax, Capital Gains Tax, Stamp Duties, Tertiary Education Tax, Technology Tax, Tenement Rates, and Property Taxes.
Earlier this month, the Finance Minister said Nigeria will reduce the rate at which it borrows money for developmental projects only if the tax to gross domestic product (GDP) hits 10 percent.
At the moment, the country’s tax to GDP ratio is at 6 percent.
“We must pay taxes properly in Nigeria, if we do this, we do not need to borrow.
“Of course I am not suggesting that there isn’t a responsibility on the part of government; we have to be more responsible, to be more efficient (when people citizens pay their taxes).
“We are really focusing on this, we are finding ways to cut cost, but fundamentally, we must invest but we don’t have the power we need, the roads, we are work in progress.
“A lot of money is needed to reposition this economy and we need to generate more through tax.
“We just need to move our tax to GDP from 6 percent from where it is now to 10 percent; it will significantly reduce the amount of money we need to borrow and that will have a wider effect on the economy.
“One, it would reduce the demand for short-term borrowing and help bring down interest rate.
“Two, it would create headroom for the private sector to borrow; that is the strategy,” Mrs Adeosun had said.
At the 3rd International Conference on Tax in Africa (ICTA) held in Abuja from September 25 to 29, 2017, stakeholders highlighted the need for African countries to build stronger domestic tax regimes by strengthening VAT, PIT and CIT.
At the Pan-African Conference on Illicit Financial Flows (IFFs) from Africa organised by Tax Justice Network Africa (TJNA) in Nairobi, Kenya, it was said that Africa has lost over $50 billion to multinationals who take advantage of weak tax laws and unfair trade treaties on the continent.
DPR Mulls Alternative Dispute Resolution Centre in Lagos
By Adedapo Adesanya
The Department of Petroleum Resources (DPR) has concluded plans to inaugurate the Advisory Council and Body of Neutrals of the oil and gas industry’s Alternative Dispute Resolution Centre (ADRC) in Lagos.
Mr Paul Osu, Head, Public Affairs, DPR, made this known in a statement issued in Lagos.
Mr Osu said that the centre would be inaugurated on April 15, pointing out that the ADRC was one of the centres in the DPR National Oil and Gas Excellence Centre inaugurated by President Muhammadu Buhari recently.
According to him, the centre will offer arbitration, mediation and conciliation services for the industry.
“The centre will leverage industry technical experts, Alternative Dispute Resolution Practitioners and resources of the National Data Repository to provide fair and balanced resolutions of industry-related disputes from an informed position.
”The ADRC is structured to adequately resolve disputes in a manner consistent with regulatory and commercial interests of the industry.
“This will address suboptimal development of oil and gas assets associated with lingering disputes,” he said.
Mr Osu added that this would eliminate the attendant consequences of value erosion in terms of national resource growth, global competitiveness, investment attractiveness and investor’s profitability.
The Department of Petroleum Resource (DPR) is a department under the Nigerian Federal Ministry of Petroleum Resources, DPR has the statutory responsibility of ensuring compliance with petroleum laws, regulations and guidelines in the Oil and Gas Industry.
NGX Group Stocks Gain 2.31% on NASD Exchange
By Dipo Olowookere
Equities of Nigerian Exchange (NGX) Group on the NASD over-the-counter (OTC) Securities Exchange closed positive on its first trading session.
The NGX Group stocks formally joined the unlisted securities market in Nigeria on Tuesday and started their first full trading day today.
The demand for the equities of the demutualised exchange, which is running as a non-operating holding company, surged on Wednesday, causing its value to rise by 2.31 per cent.
Business Post reports that NGX Group stocks were listed on the NASD Exchange yesterday at a unit price of N25 and at the market today, they rose to N25.59.
According to data obtained by this newspaper, the firm listed a total of 1,900,000,000 units of its securities on the alternative bourse, boosting the market capitalisation by N48.6 billion.
The exchange used to be known as the Nigerian Stock Exchange (NSE) but after its conversion, it became NGX Group Plc with three subsidiaries: Nigerian Exchange (NGX) Limited, the operating exchange; NGX Regulation (NGX RegCo) Limited, the independent regulatory arm of the exchange; and NGX Real Estate (NGX RelCo) Limited, the real estate company.
Our Worry Not Current Debt Levels—FG
By Dipo Olowookere
The federal government has described the current debt levels of Nigeria as comparatively good, noting that the major worry, for now, is how to diversify the economy to increase the revenue sources.
Last week, the Governor of Edo State, Mr Godwin Emefiele, shocked many Nigerians when he said the nation was currently undergoing a huge fiscal crisis.
He said the federal government printed N60 billion to share to the state governments in March 2021 when the revenue generated in February was not enough to meet the demands of the other tiers of government. This sparked reactions from Nigerians.
The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, while speaking with the Africa Department Director of the International Monetary Fund (IMF), Mr Abebe Selassie, blamed COVID-19 for the challenges the nation was passing through at the moment, saying that the country was gradually getting back on its feet when the global health pandemic struck in 2020 and reversed the gains achieved so far.
However, she said the careful implementation of some policies of the government ensured that Nigeria exited recession it slipped into last year with the 0.11 per cent growth in the gross domestic product (GDP) in the fourth quarter of 2020.
“Although the GDP recorded a growth rate of 0.11 per cent (year-on-year) in the fourth quarter of 2020, in contrast to -3.62 per cent in Q3 2020 and 2.55 per cent in the corresponding period of 2019 (NBS), and inflation creeping through 17.33 per cent, we are a bit encouraged by the recent IMF forecast of 2.5 per cent,” she said.
The Minister praised the effectiveness of the Economic Sustainability Plan (ESP) with the support of development partners, including the World Bank Group (WBG) last year.
According to her, the policy trade-offs of the government quickly filled the deepening gaps created by the COVID-19 crisis as “it did not only push us back to a recession but also reversed most of the development gains recorded in the past decade.”
Debt levels sustainability
While commenting on the nation’s debt sustainability, Mrs Ahmed said that the government was committed to addressing the issue as the administration was “mindful of our experiences in this regard and the credibility and commitment of President Buhari to transparency and accountability in public expenditure.”
“We take note that our current debt levels are comparatively good, but we are aware of the pressures on debt services and commend the WBG and The Group of Twenty (G20) for the debt service suspension initiative (DSSI).
“However, with current obvious limitations of the DSSI, we may not embrace it, and would prefer to focus on diversifying our economies and enhance efforts at revenues mobilisation and other best practices and would appreciate the understanding and strong support of the IMF in expanding the monitoring and reporting of all public spending, as well as ensuring easy public access to spending data.
“We commend the extension of the DSSI to 2021 as a positive step, but there is a need to address the apparent reluctance of the private creditors to participate in the initiative as their participation will ensure a meaningful treatment of debt challenges of countries requesting support under this framework,” she said.
COVID-19 vaccine supply
The Minister said discussions with multilateral institutions such as the IMF could not be thorough without discussing the ongoing COVID-19 vaccination.
“The vaccination programme for Nigeria has been progressive and is gradually yielding needed results. As at the time of this meeting, slightly less than a million doses of the vaccine have been administered, representing less than 0.5 per cent of the population of the country.
“We are working assiduously to cover much ground by ensuring that as many as are willing to be vaccinated are promptly attended to,” she said.
She further said, “However, Nigeria like many countries in Africa, is concerned about adequate supply. The proper thing maybe for producer countries to release their excess stock of vaccines to developing countries that currently have limited or no access.
“We would appreciate your assistance in that regard. Similarly, multilateral institutions such as the IMF/World Bank are encouraged to continue to pool resources together, particularly the COVAX facility and the African Union (AU) initiative to support local manufacturers in the production of vaccine in Africa. “
Nigeria Begs France for Additional Loan
By Aduragbemi Omiyale
The federal government of Nigeria has appealed to France to grant it an additional loan aimed to develop the country and provide the dividends of democracy to the citizens.
The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, made his plea when she received the French Foreign Trade Minister, Mr Frank Reister, at her office in Abuja recently.
Mrs Ahmed described the credit facility of the European country as “highly concessional” and that it would support the government’s development agenda.
The Minister said the government was happy to have the French government as a partner, reiterating the commitment of the administration of President Muhamadu Buhari to a stronger bilateral tie with France
She also expressed the commitment of the nation to accelerating the preparation of the health project in Oyo State to ensure the effectiveness of the project.
In his remarks, Mr Reister commended the government for its different development strides, explaining that he was in Nigeria to “strengthen the Nigeria/French bilateral relations and to strategise with the government and other stakeholders on how to improve the present relationship.
“We want to strengthen the links between the French and Nigerian private sectors,” the French Minister declared.
“We want to look at our long-term investments, fight against climate change, explore financing options for different projects in Nigeria and support Nigeria in its gas project,” he said.
The visit is coming on the heels of the summit of African economies in Paris in May 2021, where President Muhammadu Buhari will be attending with others to deliberate on the objectives to help boost a strong inclusive recovery in Africa and accelerate the green and digital transition in line with the sustainable development goals (SDGs) and Paris Agreement on climate change.
BUA Cement Lists N115bn Bond on Nigerian Exchange
By Dipo Olowookere
The N115 billion 7-year series I fixed rate senior unsecured bond of BUA Cement Plc has been listed on the trading platform of the Nigerian Exchange (NGX) Limited.
The paper was admitted on the exchange on Tuesday, April 13, 2021, and to commemorate it, the CEO of BUA Cement, Mr Yusuf Haliru Binji, was honoured with the digital closing gong ceremony.
Mr Binji thanked the management of NGX Limited for the invitation to bring trading activities to a close, describing it as “another key milestone on our journey to becoming the preferred cement manufacturer in Africa.”
He explained that the cement maker accessed the debt capital market to source for N100 billion “as part of our growth strategy.”
The BUA Cement chief said the decision to raise more than N100 billion in the first tranche of the firm’s N200 billion programme was due to the “overwhelming response and in accordance with the Securities and Exchange Commission’s guidelines.”
“For us, this was a clear assessment of our viable business model, strong financial performance, and the strength of our product offerings,” Mr Binji stated.
Speaking on behalf of the parties to the transaction, the CEO of Stanbic IBTC Capital, Mr Funso Akere, expressed the delight of the organisation at being the adviser to BUA Cement Plc on the transaction “where they took advantage of very supportive conditions in the debt capital market to raise long term funding.”
“On behalf of Stanbic IBTC Capital Limited, Tiddo Securities and Union Capital, we would like to thank BUA Cement for giving us a freehand to guide them and the commitment showed to make the transaction a phenomenal success. We would also like to thank NGX for giving us a platform to list the bonds,” Mr Akere said.
On his part, the Divisional Head of Listings Business at NGX Limited, Mr Olumide Bolumole, stated that the exchange was “excited about BUA Cement’s debut bond offering which was oversubscribed by 37 per cent to the tune of N137.82 billion and represents the largest amount raised by a corporate issuer in the history of Nigeria’s debt capital market.”
“Without a doubt, this is a testament to the high level of confidence placed on this reputable brand by its investors and the entire market,” he said.
Mr Bolumole added that, “In line with its commitment to support Nigeria’s economic growth by providing a liquid, efficient, and multi-asset securities exchange hub, NGX Limited continues to provide a platform that offers investors varied options including equity, fixed income, Exchanged Traded Products (ETPs) and other funds.”
NGX Group Shares Now Available for Trading on NASD
By Adedapo Adesanya
NASD Plc, which operates the NASD Over-the-Counter (OTC) Securities Exchange, has announced the admission of the shares of the Nigerian Exchange Group PLC (NGX) for trading on its platform.
In an announcement on Tuesday, April 13, the only OTC bourse in the country noted that the move comes after the successful demutualisation of the Nigerian Stock Exchange (NSE) now known as the NGX Group PLC.
NGX Group shares became available for trading by licensed participating institutions or authorised traders registered on the NASD platform from Tuesday.
The demutualisation of the exchange has led to the emergence of the NGX Group Plc and three subsidiaries; Nigerian Exchange (NGX) Limited, NGX Regulation (NGX RegCo) Limited and NGX Real Estate (NGX RelCo) Limited.
Mr Temi Popoola is the CEO of NGX Limited, while Ms Tinuade Awe was appointed as the CEO of NGX RegCo Limited.
Speaking earlier this month after the completion of his tenure as the CEO of the old NSE, Mr Oscar Onyema, honoured with the digital closing gong ceremony as he set to continue in his new capacity as the GCEO, NGX Group Plc, noted thus, “I arrived at The Nigerian Stock Exchange when the stock market was in the doldrums, investors’ confidence low, mono-product and the bourse under regulatory administration. With tunnel vision collaboration with stakeholders in the financial system and perseverance, we have been able to surmount almost all of the challenges.
“I am delighted to have worked with the astute members of the National Council, visionary leaders in the Executive Committee and expert crop of staff at The Exchange to have delivered excellent results. We have come a long way from where we used to be and I am excited about the opportunities demutualisation has opened for us in the coming years.
“I must reiterate my commitment to ensuring that the NGX Group Plc and its subsidiaries deliver on the mandate to become Africa’s leading capital market infrastructure provider. I look forward to deepening partnerships with existing stakeholders and exploring new collaborations locally and globally to bring this to bear.”
Business Post had reported that NGX launched its new corporate brand identity and website rendering the previous nse.com.ng obsolete.
The NGX brand identity follows a monolithic brand architecture, which will facilitate the formation of any new subsidiary by leveraging existing brand equity. The identity is inspired by the arrows of the stock exchange ticker tape as well as monetary exchange between a buyer and seller. These arrows are stylised to form an ‘N’ and denote the act of collaboration.
Together with the new vibrant, modern and responsive website, NGX Group offers an enriched user experience. Accessible via ngxgroup.com, information about the group and the various subsidiaries are independently situated but featured as one website.
The blockchain brings new financing options to the business market. For example, Bitcoin Cash casino has adapted to only using cryptocurrency. This way, it makes it easier for their customers to deposit and withdraw in a BCH casino. Entrepreneurs have taken note of this and are looking to invest more in crypto than in fiat markets.
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